Dr. Lal PathLabs Limited (DLPL) Q3 & 9M FY18 Results Presentation February 08, 2018

Transcription

1 Dr. Lal PathLabs Limited (DLPL) Q3 & 9M FY18 Results Presentation February 08, 2018

2 Disclaimer By attending the meeting / telephonic call where this presentation is made, or by reading the presentation materials, you agree to be bound by the following limitations: The information in this presentation has been prepared by Dr. Lal PathLabs Limited (the Company ) for use in presentations by the Company at analyst and investor meetings and does not constitute a recommendation regarding the securities of the Company. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information, or opinions contained herein. Neither the Company nor any of its advisors or representatives shall have any responsibility or liability whatsoever (for negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially. Neither the Company nor any of its advisors or representatives is under any obligation to update or keep current the information contained herein. The information communicated in this presentation contains certain statements that are or may be forward looking. These statements typically contain words such as "will", "expects" and "anticipates" and words of similar import. By their nature forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Any investment in securities issued by the Company will also involve certain risks. There may be additional material risks that are currently not considered to be material or of which the Company and its advisors or representatives are unaware. Against the background of these uncertainties, readers should not unduly rely on these forward looking statements. The Company, its advisors and representatives assume no responsibility to update forward-looking statements or to adapt them to future events or developments. This presentation has been prepared for informational purposes only. This presentation does not constitute a prospectus under the (Indian) Companies Act, 2013 and will not be registered with any registrar of companies. Furthermore, this presentation is not and should not be construed as an offer or a solicitation of an offer to buy securities for sale in the India. This presentation and the information contained herein does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities of the Company, nor should it or any part of it form the basis of, or be relied on in connection with, any contract or commitment whatsoever. The securities of the Company have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered, sold or delivered within the United States or to U.S. persons absent from registration under or an applicable exemption from the registration requirements of the United States securities laws. This presentation and the information contained herein is being furnished to you solely for your information and may not be reproduced or redistributed to any other person, in whole or in part. In particular, neither the information contained in this presentation nor any copy hereof may be, directly or indirectly, taken or transmitted into or distributed in the U.S., Canada, Australia, Japan or any other jurisdiction which prohibits the same except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of the United States or other national securities laws. No money, securities or other consideration is being solicited, and, if sent in response to this presentation or the information contained herein, will not be accepted. By reviewing this presentation, you are deemed to have represented and agreed that you and any person you represent are either (a) a qualified institutional buyer (within the meaning of Regulation 144A under the Securities Act) or (b) not a U.S. person (as defined in Regulation S under the Securities Act) and are outside of the United States and not acting for the account or benefit of a U.S. person. 2

3 Q3 FY18 Snapshot 26.6% Revenues INR 2,627 mn Samples Processed ~8.69 mn 20.2% EBITDA INR 566 mn Patients Tested ~3.82 mn 17.7% PAT INR 364 mn ~4326 Total Employees 3

4 Kolkata Regional Reference Lab Pilot testing operations commenced at the Regional Reference Laboratory at Kolkata Kolkata Reference Lab received final regulatory clearances and pilot testing operations have commenced. The World-class Lab will cater the demand from Northeast as well as Eastern regions of India. It will also cater to neighboring international markets. 4

5 Table of Contents 1 Overview of Dr. Lal PathLabs 2 Key Performance Highlights 3 Financial Table 4 Financial Highlights 5 Operating Highlights 6 Management Commentary 7 Outlook 8 Corporate Overview 9 Shareholding 10 Contact Us DISCLAIMER: This presentation may contain forward-looking statements at places. The Company s business operations remain subject to undetermined contingencies and risks. Dr. Lal PathLabs Limited would not be liable for any action undertaken based on such forward-looking statements and does not commit to revising/updating them publicly. 5

6 Overview of Dr. Lal PathLabs Established consumer healthcare brand in diagnostic services 189 clinical labs (including National Reference Lab at Delhi),1,759 Patient Service Centers (PSCs) and 5,021 Pick-up Points (PUPs)* Scalable model integrated through centralised IT platform allows for network expansion Catalogue of 1,110 test panels, 2,028 pathology tests and 1,561 radiology and cardiology tests* Well-positioned in one of the fastest-growing segments of the Indian healthcare industry *As on March 31,

7 Key Performance Highlights Strong volume momentum achieved in Q3 expected to continue; captures growth in patient volumes and tests per patient. Initiatives to mitigate impact from GST, market pricing pressures and wage corrections supporting margins During Q3 FY18: Recorded revenues of Rs. 2,627 million in Q3 FY18, up 26.6% led by 26.1% volume growth o Base was lower in the previous year due to demonetisation Number of patients tested stood at 3.82 million in Q3 Normalised EBITDA (after eliminating the impact of RSU and other stock based remuneration charges) stood at Rs million Cash, FDs and Liquid Investments at Rs. 4,903 million as at December 31, 2017 from Rs. 4,330 million as at September 30, 2017 Completion of Kolkata RRL and natural accretion to available network across the country to drive expansion in East. Key features of performance will be: Traction in walk-ins expected to improve; online presence driving healthy uptake of services Additional streams to accrue from bundled tests rolled out nationally Disciplined approach to managing costs and driving margins Note: Financial results of the Company are best monitored on a year to date basis, as there is a certain level of seasonality in business and specific quarter performance may be influenced by certain occurrences in that quarter. All figures in the presentation pertain to the consolidated results in Ind-AS format. 7

8 Financial Table Particulars (Rs. mn) Q3 FY18 Q3 FY17 Growth % 9M FY18 9M FY17 Growth % FY17 Total Revenue 2, , % 7, , % 9,123.8 Total Expenditure 2, , , , ,749.2 EBITDA % 1, , % 2,374.6 RSU and stock based remuneration charge Normalised EBITDA excl RSU % 2, , % 2,460.7 Normalised Margins 22.7% 23.5% 26.4% 27.7% 27.0% Other income incl interest % % PBT % 1, , % 2,367.3 Margins 21.1% 22.7% 25.2% 27.1% 25.9% PAT % 1, , % 1,547.7 Margins 13.9% 14.9% 16.7% 17.9% 17.0% EPS (Basic) % % EPS (Diluted) % % All figures as per Ind-AS except where stated 8

9 Financial Highlights Revenues All figures in Rs. mn 2,075 Q3 FY17 2,627 Q3 FY18 Q3 showed strong growth in revenues at 26.6% to Rs. 2,627 million. Drivers during the quarter were: Expansion in patient volumes which stood at 26.1% This maps to growth in the number of patients tested together with improvement in tests per patient metric Realisation per patient has stood stable at Rs. 688 owing to price rationalisations undertaken during the year in select geographies. This was partially offset by higher realisation from bundled tests 6,925 7,901 Revenues in 9M came in at Rs. 7,900.6 million, rising 14.1% with healthy volume growth of 13.2% 9M FY17 9M FY18 Financial results of the Company are best monitored on a year to date basis, as there is a certain level of seasonality in business and specific quarter performance may be influenced by certain occurrences in that quarter 9

10 Financial Highlights Normalised EBITDA (after eliminating the impact of RSU and other stock based remuneration charges) All figures in Rs. mn 487 Q3 FY Q3 FY18 Q3 normalised EBITDA (after eliminating the impact of RSU and other stock based remuneration charges) showed 22.5% growth following: Measures taken to enhance productivity Better traction in cost management Pressures from GST, correction in minimum wages and market pricing for tests continue to impact to some extent Q3 Normalised EBITDA margin was at 22.7% 1,919 2,083 9M normalised EBITDA (after eliminating the impact of RSU and other stock based remuneration charges) showed growth of 8.6% to Rs. 2,083.2 million 9M normalised EBITDA margin stood at 26.4% 9M FY17 9M FY18 10

11 Financial Highlights PBT All figures in Rs. mn Q3 PBT stood at Rs million in vs. Rs million in same quarter last year Q3 PAT stood at Rs million vs Rs million in Q3 previously Q3 FY17 Q3 FY18 1,880 1,993 9M PBT rose 6% to Rs. 1,993.4 million from Rs. 1,879.9 million the year ago 9M PAT increased 6.7% to Rs. 1,319.5 million from Rs 1,237.0 million in the previous period 9M FY17 9M FY18 11

12 Operating Highlights No. of Clinical Laboratories No. of PSCs No. of PUPs ,064 1,340 1,559 1,759 4,225 5,668 4,967 5,021 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 No. of patients (mn) No. of samples (mn) FY14 FY15 FY16 FY17 9M FY18 FY14 FY15 FY16 FY17 9M FY18 12

13 Management Commentary Commenting on the results announcement, Dr. Arvind Lal - Chairman and Managing Director said; We have demonstrated a strong performance during the quarter backed by our focus on providing reliable and accurate diagnostic healthcare services to our customers through a robust network. With focus on quality and reliability of services combined with expanded product offerings, Dr. Lal is today one of India s leading consumer healthcare brand in diagnostic services. I am glad to share that we have commenced testing at the Regional Reference Laboratory at Kolkata and remain on track to do a market launch once the operations get stabilized. Commenting on the results announcement, Dr. Om Manchanda, CEO - Dr. Lal PathLabs said; We reported accelerated earnings growth during the quarter underlined by efforts on optimising costs as well as higher volumes recorded from gains in patient volumes and tests per patient. We are mindfully managing the costs, optimising productivities and maintaining focus on what we have always believed in, through our disciplined approach. With the commissioning of the Kolkata Regional Reference Laboratory, we aim to realise the success of driving a hub and spoke set up in Eastern India and beyond in neighboring countries. The outlook looks equally robust as our strategy to grow with the new Reference Lab fructifies and we are able to consolidate gains in the form of higher samples processed. 13

14 Outlook Robust operating model best-positioned to capitalize on growth trends in diagnostic services -one of the fastest-growing segments of the Indian healthcare industry Will leverage established position of a strong consumer healthcare brand in diagnostic services Initiatives to improve brand connect to continue To grow model with holistic approach with emphasis on scalability of reach and IT processes Driving profitable growth while continuously strengthening our balance sheet 14

15 Corporate Overview DLPL Strategy for future growth Experienced Management team 15

16 DLPL Strategy for future growth 1) Strengthen Existing Operations 2) Expansion in Offering 3) Expand management of hospital based and clinical laboratories 4) Geographic expansion 16

17 DLPL Strategy for future growth 1 Strengthen Existing Operations Boosting quality & reliability standards Improving turnaround times for testing Grow basic radiology practice Online initiatives and data analytics Investment in branding 2 Expansion in Offering Improve breadth of diagnostic testing Cutting edge technology Preventive healthcare screening Chronic & Lifestyle disease mgmt. services Expand reach in corporate segment 3 Expand management of hospital based and clinical laboratories Tap incremental contracts for in sourcing test of hospitals and other clinical laboratories Tap polyclinics 4 Geographic expansion Focus city approach Set up more clinical laboratories Set up Regional Reference Laboratories Consider alliances and acquisitions 17

18 Experienced Management team (Hony.) Brig. Dr. Arvind Lal Chairman and Managing Director Dr. Om Manchanda Whole-time Director and Chief Executive Officer Dr. Vandana Lal Whole-time Director Dilip Bidani Chief Financial Officer Bharath Uppiliappan Chief Operating Officer Shankha Banerjee Chief Growth Officer Munender Soperna Chief Information Officer Dr. Neelum Tripathi National Director Lab Operations Manoj Garg Chief Human Resources Officer Ved Prakash Goel Deputy CFO Rajat Kalra Company Secretary and Compliance Officer Manoj Sahay Chief Marketing and Strategy Officer 18

19 Shareholding as of 31st December, % 12.5% 10.5% 0.3% 19.3% Promoter and Promoter Group Mutual Fund FII DII Others 19

20 Contact us About Dr Lal PathLabs Limited (DLPL) Dr Lal PathLabs Limited is one of India s leading consumer healthcare brand in diagnostic services. It has an integrated nationwide network, where patients and healthcare providers are offered a broad range of diagnostic and related healthcare tests and services for use in: core testing, patient diagnosis and the prevention, monitoring and treatment of disease and other health conditions. The services of DLPL are aimed at individual patients, hospitals and other healthcare providers and corporates. The catalogue of services includes 1,110 test panels, 2,028 pathology tests and 1,561 radiology and cardiology tests. As on March 31, 2017 DLPL s has 189 clinical labs (including National Reference Lab at Delhi), 1,759 Patient Service Centers (PSCs) and 5,021 Pick-up Points (PUPs). In FY16 & FY17, DLPL collected and processed approximately 26.3 million samples and 29.3 million samples from approximately 12.0 million and 13.3 million patients, respectively. For further information please contact: Dilip Bidani Dr. Lal PathLabs Limited Tel: Fax: dilip.bidani@lalpathlabs.com Siddharth Rangnekar / Nishid Solanki CDR India Tel: / 1221 Fax: siddharth@cdr-india.com / nishid@cdr-india.com Additional information on Dr Lal PathLabs Limited: Corporate Identification No: L74899DL1995PLC Website: 20